⭕What is Cycle?
Cycle Launchpad
[Whitepaper]
The thesis of "Cycle" centers around creating a sustainable and circular economic model for creators in the Solana blockchain ecosystem. This model is achieved through a unique approach to NFT (Non-Fungible Token) project launches and fund management. Here's a breakdown of the thesis, elaborating on its key components and implications:
Sustainable Path for Creators: The core premise of Cycle is to offer creators a stable and ongoing revenue stream. By using the Solana blockchain, which is known for its efficiency and low transaction costs, Cycle aims to make it economically viable for artists to launch and manage their NFT projects.
Launch of NFT Projects on Cycle: Artists can use Cycle to launch their NFT projects, leveraging the platform's infrastructure for exposure and transaction handling. This enables artists, especially those who might lack technical expertise, to participate in the NFT space.
Capital Raised Through NFT Sales: The funds raised from selling NFTs are locked in a smart contract. This mechanism ensures that the capital is not directly accessible either to the project owner or the users, promoting transparency and trust.
Redemption of Mint Funds by Users: Users who purchase NFTs have the option to redeem a portion of their mint funds, as predetermined at the project's launch. This feature introduces liquidity and flexibility for NFT owners, addressing one of the common criticisms of the NFT market – the lack of liquidity.
Return or Repurpose of NFT upon Redemption: When a user redeems their mint funds, the corresponding NFT is returned to the project owner. The NFT can either be destroyed (burned) or repurposed for future use (as determined by the creator). This step ensures that the NFTs remain a controlled and sustainable resource.
Ineligibility of Redeemed NFTs for Further Funds: Once an NFT has been redeemed, it's no longer eligible to collect funds from the pool, ensuring a fair and balanced economic model. Owners may reintroduce redeemed NFTs back into the pool if the corresponding mint proceeds are also funded.
Investment of Mint Proceeds in DeFi Protocols: The mint proceeds are invested in various DeFi (Decentralized Finance) protocols, such as swaps to Marinade, Synatra, or Jito, to generate yield. Yields may be enhanced further through contributions to pre-selected yield boosts (such as liquidity pools). This approach not only diversifies the investment but also taps into the growing DeFi sector within the blockchain ecosystem.
Distribution of Yield: The yield generated from these investments is collected monthly and redistributed to the owner's wallet via an airdrop. This system creates a continuous flow of income back to the project owners, contributing to their financial sustainability. Such yield may be shared with collectors as well, via the staking protocol. NFT holders may receive a pro-rata share of the yield generated based on a pre-determined revenue share selected prior to the project’s launch.
Overall, the Cycle platform aims to revolutionize the way artists and creators engage with the NFT market on the Solana blockchain. By introducing mechanisms for fund redemption, sustainable management of NFTs, and yield generation through DeFi protocols, Cycle proposes a model that balances economic incentives with sustainability and growth, both for artists and NFT owners. This could potentially address some of the critical challenges faced in the NFT market, such as liquidity issues, financial sustainability for artists, and the responsible use of blockchain resources.
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